Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), a  Fortune 300 automotive retailer with 202 dealerships located in the U.S. and U.K., today announced it has entered into a definitive agreement to acquire the U.K. automotive retailing business and related owned real estate from a subsidiary of Inchcape plc for approximately $439 million (£346 million) in an all-cash transaction, inclusive of $279 million (£220 million) of appraised real estate value.  In 2023, the Inchcape U.K. dealerships generated approximately $2.7 billion USD (£2.1 billion) in annual revenues.  The transaction is subject to the receipt of approval from the Financial Conduct Authority and is expected to close in the third quarter of 2024.

Group 1's President and Chief Executive Officer Daryl Kenningham stated, "Group 1 has successfully operated in the U.K. since 2007 and we are extremely pleased to have this opportunity to grow in this important market.  Inchcape's brand mix is outstanding. These new stores complement our geographic footprint in the East and South East of England and enable us to expand into new markets in the Central and North West regions of England and Wales. Inchcape's exceptional reputation has been built over 50 years in the retail business.  We look forward to welcoming our new teammates to the Group 1 family."

With 54 dealership locations across major hubs in England and Wales, Inchcape's U.K. dealership portfolio includes Audi, BMW/MINI, Jaguar Land Rover, Lexus, Mercedes-Benz/smart, Porsche, Toyota, Volkswagen and Volkswagen Commercial Vehicles.  On an aggregate basis, these dealerships sell over 63,500 new and used vehicles, and 24,000 corporate units, annually.

Group 1's Senior Vice President and Chief Financial Officer Daniel McHenry added, "While this transaction provides a transformation in scale for our company in the U.K., our U.S. credit facility pro-forma leverage ratio will be approximately 2.2x after taking into account the financing of this transaction with debt and cash on hand, and liquidity remains comfortably within our targets.  This gives us the flexibility to continue shareholder-focused capital allocation, which includes accretive acquisitions, share repurchases, dividends, and return-driven capital expenditures."

Year to date 2024, Group 1 has completed $1.0 billion of acquired revenues, and with this proposed acquisition, total acquired revenues are expected to be approximately $3.7 billion at the anticipated closing date in the third quarter of 2024.  With the addition of the Inchcape dealerships, Group 1's total U.K. dealership count would increase to 109, and 256 locations in the U.S. and U.K.

The Company will provide additional details about the Inchcape acquisition on its upcoming earnings call on April 24, 2024 at 9:00 a.m. ET.

J.P. Morgan Securities LLC acted as exclusive financial adviser to Group 1 on the transaction. Dentons UK and Middle East LLP acted as legal adviser to Group 1.

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